An offshore bank account will allow you to safely and privately explore, with
few restrictions, the far reaches of the vast and diverse financial universe;
from the bond markets of Korea to the stock exchanges of Eastern Europe; from
ultra-private Liechtenstein trust arrangements to the most successful funds;
from unique commodity investments to Caribbean corporations; from Israeli
nanotech start-ups to age-old European blue-chips; from the mysterious and
secretive world of offshore mutual funds to tax-free Swiss gold accounts; from
Isle of Man Insurance contracts to Danish multi-currency investment accounts;
from uniquely structured tax-free Austrian funds to Bulgarian mortgages; and
much more beyond.
With one phone call, or even just the click of your mouse, an offshore bank
account will allow you to:
Privately trade stocks, bonds, mutual funds, CDs, precious metals and currencies
on markets everywhere (including CDs that pay up to 16% after currency gains and
emerging market stocks and funds traded on exchanges that have soared 496%…407%…
and 232% in the past few years).
Diversify your assets out of American dollars and convert them into currencies
set to soar against the dollar in the volatile times ahead, like the rock-solid
Swiss franc, the euro and many more commodity currencies upon which we’ve
already seen staggering gains of 1,794% and 797% by recommending select little
known currency investment techniques.
Buy into special types of mutual funds, which are managed by legendary,
award-winning financial analysts, who rank among the world’s best. These
offshore fund managers have consistently proven to outperform their American
counterparts, as they are able to trade markets and asset classes far more
freely than American fund managers, and they’re allowed to employ far more
flexible and powerful investment techniques. You will able to profit from some
of the world’s top funds and advisors…from Luxembourg to Thailand…from Korea to
the Caribbean…some of which have boasted returns of as much as 867% in a 5-year
period. Compare that to the average American mutual fund that, at best, has
provided anaemic single-digit returns over the last 5 years.
The articles below originally appeared in our montly newsletter, The
Individual and will help you more fully understand the benefits of offshore
banking and using an offshore bank account. You can learn more about offshore
banks, tax havens and asset protection in The Individual each month by
becoming a member of The Offshore Simple. Click here for details on membership.
More About Offshore Banking
The “New” Offshore Bank—No Longer Just for Millionaires - by Kathlyn Von Rohr
The “New” Offshore Bank—No Longer Just for Millionaires
By Kathlyn Von Rohr
Years ago, you had to be very wealthy to meet the minimum balances and afford
the banking fees for an offshore bank account. Not anymore. After dramatic
changes in international banking and Internet communications, you can secure a
relatively modest offshore account, as your quick, inexpensive entry into the
world of foreign investments. And while some nations, like Switzerland, may ask
for high minimum deposits, others are relatively low.
An offshore bank account in the right jurisdiction provides layers of asset
protection, as well as better investment opportunities. An offshore account
shields your assets from greedy settlement-seeking lawyers or determined
creditors who want to seize your wealth (in most offshore jurisdictions, they
won’t get past the local courts).
Better Investments, Less Taxes
Yes, your cash will be safer offshore, but one of the big pluses of an offshore
account is your power to trade freely and invest widely in foreign-issued
stocks, bonds, mutual funds and national currencies. You can diversify with
instant access to the world’s best investments without being hindered by U.S.
laws or SEC rules. You can buy attractive life insurance and annuity products
unavailable in the U.S. and Canada. Tax savings may result from deferred
investment earnings, capital gains or appreciation, rather than being
immediately hit with taxable ordinary income.
Choosing the right jurisdiction for your offshore bank account makes all these
investment opportunities possible. Here’s a quick look at three top
jurisdictions where you can secure an affordable offshore account.
Austria: Constitutionally Guaranteed Privacy
After a tradition of banking privacy that lasted two centuries, Austrians
finally wrote bank privacy laws right into their constitution in 1979. According
to the constitution, bankers are forbidden to divulge your financial information
“Austrian banking involves two way communication—bank/client, client/bank—that’s
it!” declared Peter Zipper, Senior Vice President of Anglo Irish Bank in Vienna.
Austrians even managed to hold onto their bank privacy when they joined the
European Union in 1995. With Austrian bank secrecy protected by constitutional
rank, the EU can try to persuade Austrians to change their policies, but the
Austrians still have the final say.
Plus, as far as safety goes, no Austrian bank has failed since 1939 when
Hitler’s anschluss took place. In the unlikely event that your Austrian bank did
ever fail, an Austrian trustee would make sure your securities holdings and
other assets were returned to you.
Denmark: Double-Digit Investment Opportunities
Denmark is not only one of the best nations to shop for international
investments, but it’s continually ranked the “safest place to bank” by Moody’s.
Plus, Danish banking fees are also significantly lower than Austria and
Denmark’s second largest bank, Jyske Bank, is internationally known for their
unequaled investments and the management of those investments. Just this spring,
Global Investor magazine named Jyske Bank the best performing European Equity
Fund Manager in Europe. And it’s no wonder. Just in 2005, Jyske Bank had five
equity funds yield more than 40% (with returns of 42%, 41%, 51%, 44%, and 60%).
But Denmark doesn’t offer the same level of banking privacy as Austria or
Switzerland because there’s no bank secrecy law. And at the end of each year,
under the EU tax directive, all Danish banks must turn over clients’ information
to the Danish tax office, which is free to share that data with foreign tax
Liechtenstein: Iron-clad Asset Protection with Safe-Haven Currency Options
Liechtenstein, a tiny independent enclave nestled between Switzerland and
Austria, is a banking haven in its own right. This Swiss neighbor uses one of
the safest currencies in the world: the Swiss franc. Plus, Liechtenstein has a
reputation of having even more bank secrecy than Switzerland. Bank secrecy may
only be lifted by a local court order and Liechtenstein rarely recognizes other
countries’ mandates. The Liechtenstein government also insures all bank
accounts—no matter how large.
However, this level of sophisticated asset protection doesn’t come cheap.
Liechtenstein’s banks have no official minimum, but they try to attract high
net-worth individuals—which means fees are high.
So as you can see, even with higher fees, banking offshore can definitely pay
off in the end (sometimes in double-digit returns). You can bank in regions
where your bankers are bound by law to keep your assets safe. You can maintain a
level of complete financial privacy where no one—from ex-spouses to creditors to
settlement-seeking lawyers can discover your assets. Plus, you can keep your
wealth in a host of currencies to protect yourself should your native currency
ever plummet. Everyone should have some money outside their home country’s
banking system. Even if it’s just as a safety net. You never know when you might
Kathlyn Von Rohr is the new managing editor of The Offshore Simple. She manages
the content of both The Individual and the daily Offshore A-Letter.
One of the greatest threats to your wealth may be lurking deep inside your
subconscious. It’s called xenophobia. “Xenophobia” describes “a person unduly
fearful or contemptuous of that which is foreign, especially of strangers or
And tragically, this fear stops individuals from seeking the whole world of
wealth opportunities available in other nations. These well-intentioned, but not
very savvy, folks store every last cent of their wealth in U.S. banks and only
invest in the U.S. investments their brokers suggest.
But it’s not too late to purge these xenophobic tendencies and move your assets
offshore. Here are just a few of the major opportunities waiting for you.
1. Asset protection. Lawsuits long ago reached epidemic proportions in the U.S.
If a creditor gets a judgment against you where you live, you could lose all
your assets, your business, home, or bank accounts. In contrast, create a trust
or family foundation or invest in a suitable offshore jurisdiction and your
finances are essentially judgment-proof.
At the very least, the long distance between a U.S. plaintiff’s lawsuit and your
offshore assets is likely to encourage a favorable settlement. And keeping
assets offshore avoids the U.S. asset-tracking network, which permits lawyers
and their investigators to easily identify and target the assets of a potential
defendant. (Revealing your offshore assets may be the best way to discourage a
lawsuit. Just tell that greedy lawyer, “try and get ‘em!”)
Thus, prudently using offshore havens can protect you from the threat of
lawsuits, civil forfeiture, bank account freezes, business failure, divorce,
foreign exchange controls, restrictive laws, or political instability.
2. Financial privacy. It’s only natural to want protection from the prying eyes
of government bureaucrats, business partners, estranged family members, or
identity thieves surfing the Internet. Financial privacy can also be the best
protection against frivolous lawsuits that could end with big judgments against
you (and no telling what cost). If you don’t appear to have sufficient funds to
justify a lawsuit in an attorney’s mind, he’ll probably drop you as a target.
Simply put, assets you place “offshore” are off the domestic asset tracking
The U.S. is one of the few nations lacking a federal law that protects bank or
securities accounts from disclosure, except under narrowly defined
circumstances. Many disclosures are illegal in other countries, either under
international agreements, or under national laws guaranteeing financial secrecy,
as in Switzerland. Privacy is especially strong if you place assets in a nation
with strong privacy laws.
There is also greater privacy when you use an international business corporation
(IBC) or a foreign-based asset protection trust (APT). Offshore financial
centers protect the identity of trust and IBC owners. While these legal entities
take a bit more time and effort, they can greatly enhance your financial
3. Investment diversification. Many of the world’s best investments and money
managers will not do business with U.S. citizens or residents directly. It’s
easier for them to do business with the rest of the world than comply with the
complicated and costly U.S. SEC rules.
4. Higher returns. There are opportunities in the traditional financial markets,
such as offshore mutual funds and London-traded investment trusts with much
higher returns than are generally available in U.S. markets. In spite of a
recent downturn, offshore and emerging stock markets have done far better than
those in America over many recent years.
5. Currency diversification. You can stabilize your portfolios and protect
against the falling U.S. dollar by simply holding or trading other currencies.
Example: earning nearly 20% on the declining dollar by trading it for the euro.
For decades, the U.S. dollar has been losing value in relation to stronger
currencies. In 1970, a U.S. dollar would purchase 4.5 Swiss francs. Since 1971,
the franc has appreciated nearly 300% against the U.S. dollar. Now the dollar
purchases only 1.2 Swiss francs. While U.S. investors can purchase foreign
currencies through a few U.S. banks, offshore banks generally offer higher
yields, lower fees, and lower minimums.
6. Safety and security. Twenty years ago, the United States experienced a wave
of bank and savings and loans failures at a rate unmatched since the Great
Depression. In contrast, offshore banks aren’t exposed to risky investments such
as third-world debt and highly leveraged derivative investments. Further, these
banks are located in politically neutral countries which do not conduct
offensive interventionist foreign policies (and thus are less likely to face a
terrorist attack than other nations).
7. “Insurance” against closure of U.S. securities markets. We all learned the
need to have part of our assets outside of the U.S. when our markets were shut
down for five full trading days following September 11, 2001. But, although U.S.
markets were closed, individuals with foreign accounts were able to trade
securities on foreign exchanges.
8. Deferred taxes. In spite of the fraudulent offshore hucksters trying to sell
offshore tax savings, for Americans, there are not a lot of tax savings to be
had by going offshore. American citizens and resident aliens are liable for
annual income taxes, no matter where that income is earned or where the person
But it is legal to purchase offshore annuities and life insurance which, if
properly created, can defer current U.S. taxes until the time when the annuity
or insurance actually is paid out. And these devices may be able to save on
estate taxes as well, giving your heirs a bigger share.
Relatively few investors are taking advantage of this global diversification.
But here’s your chance to take advantage of the impenetrable asset protection
available offshore. At the very least, this is your chance to store a portion of
your assets offshore just in case.
For the very good reasons listed above, and for self-interest as well, none of
us can afford to be xenophobic in the 21st century. There’s a whole wide world
out there—offshore—and you only need to recognize that fact and act.
Fun With Numbers
Modern day life is filled with numbers, and some apply to the offshore world
more than others. Here are some interesting numbers to think about…
* 20%. Estimated number of the 285 million American citizens who have passports.
* 1.4 million. The estimated number of Americans who left to live offshore since
* 600,000. Estimated number of British citizens who leave to live offshore
* 800. Average number of U.S. citizens annually who relinquished citizenship in
* 33.9%. The amount the top-earning 1% of U.S. taxpayers pay of all U.S.
individual income taxes collected.
* Zero. The amount of income taxes paid on offshore income by a resident
foreigner in Panama, Andorra, Campione, or Monaco.
* 25%. Estimated amount of U.S. pension funds invested offshore.
* 300%. The amount the Swiss franc has appreciated against the U.S. dollar since
* US$750,000. Minimum amount usually needed to open an investment account in
Liechtenstein—though The Offshore Simple offers one for US$70,000.
What You Need to Know Before Investing or Doing Business Offshore
While investing or doing business offshore is perfectly legal for U.S. citizens
and residents, there are a few legal formalities you should keep in mind.
The most important of these is that you are responsible for paying taxes on your
worldwide income. In addition, many types of offshore investments are subject to
separate reporting requirements. Also, transfers of US$10,000 or more in cash or
cash equivalents across U.S. borders must be reported, as well as the formation
and funding of a foreign corporation, trust or partnership.
While it’s easy to comply with some of these requirements—such as the annual
filing of the “foreign bank account reporting” (FBAR) Form TD F 90-22.1, other
forms (such as those necessary to report a foreign trust relationship) are more
complex. To assist you in complying with these more complex reporting
requirements, we recommend the services of a qualified tax attorney.
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